Indian Planning Commission Aluminium Co. of America

- _area Annual rate of

inorease

Souroe of projection

World 1957-1980

1962-1971 -' Free'W 6i'ld ... "'-'1964-1970 1964-1970

Dr. E.G.West, United Kingdom Kaiser Aluminium & Chem.Co.

BaChe

&

Co., New York GATT

Twentieth Century Fund, NY Aluminium.Limited, Canada European Gommon Market European Free Trade Area World

Bank ,

USA

Paley Commission, USA J.E.Rosenzweig, USA

Resources for the' Future, USA Wilbert

G.

Fritz, USA

US Dept. of Commerce US Dept. of Commeroe Development and Resources Aluminium Co. of America

'3:/

,~;rollJ

I3:l,endi,ng pub.Ljc a td on , "'The Aluminium Industry of the Facific Northwest",

\lsed by permission ,of tb.f, Bonneville Power Administration, D'S Department of the Interior, (Portlar.d, Oregon, USA) •.,..

".1..1', c,

I , '

...:: »: :-,:<'.J.~~c

?"---8

e

APPENDIX_ TABLE 6

ConsUl1lPti'<J1'i--<'lf Pr-imary Aluminium in Various Countries :1,.961, an,d ,Per Capita National Income, 1261

1938 and

c_____ _ _ 1938 -77-~--:C-_...::1""9.:::;61=---:;-,-

--,-==_

co~sumPtionJil

ConsumptioJ?!

Population Total Per Total Per

'cc, _,"in ^{c- /} in ' capi,t-a - in capita millicons2' 'Jc,OOO,

in

^{1,000 in}

metric kilos metric kilos

_ ~ ~_ _-,-t.=.;on::,6 _--'t:..:o::;n:.:s'-- ...,,... -,-_

Austr3.J.ia.,o:..,.\><".~'< ^{r: ..}

I t

atv.

^{G . , ' ,} ~^{" ,} ~^'"

J_"'~:!,?.-:: ':' " ,.<> '" .,.~ ~ ^{0.q .}

·~·"::;i:..:,~J t·,,~~-5.,}.,-,..^{G.. "' ' "}

}o.l~',~-,r)_,".", .._,~ .. ,'.0 , ' .. 'tI:>

'cc _c c _

"J,- _,'

H'ih" Bachmann , ,l!-l'2!!!iniuill cas an Export Industry, United Nations Conference on 'Prade and Developmont,EIConf.46/P!10(Contributed paper 10), February

4;

1964,

p.49, except for 1938 consumption for USA, 'see footnoteb.

::-"'~;c"tjcca1 Yearbook of Switzerland, 19:)7 and 1';163, population figures nearest

Jj;-j a'1d 1961.

:<:llgese11schaft, Metallstatistiks-, except for US oonsumption, 1938, taken as ,,',5 ..::939 average from Engle, Grego!'y and Mosse, AIUll\inium(1944) p.252.

c_~~"..:t,!o.stical Yearbc,ok 1962, national inoome p.487, rates of exchange, p.510.

v, +,1.3 ~asis of the ;heoretical rates of exchange indicated in the UN Statistical

l '-'IY;jk

1962,

p.519>

-_ ^...

---"""'----~.

-

.---il.PPENDIX A

PRIVATI: ;;JIlD GCV-:RNMillTT OvlNBRSEIP IN TliK,l':ORLD FRIMARY ALmUnUM DfDUSTRY

s/

E/CN • 14/INR/tOO App'mdix A

1. The world primar! aluoinum industry is in the hands of privately o,mec1,-c,ompanies, ani also enterprises owned Dr

.

^{, . , ,} ..

gO'Ternments, both Communist and ncn-Commum st ,

partly

As

^of

controlled by 1964, ^nearly

one-t~ird of the capacity was owned:br c6~ttolled by governments and just over two-thirds by _pri~ate companies. ,The present ,W9'I'ld trend 1s for government ownership or partioipat:i6Il to e'xpand"Xt",-'share of the Lndustr-y ,

2. The privately controlled sector of the world 'industry is

con-'_r{'::. , ,.: :. . ' • . . , - . "

trolled and influenced by~a.~;ha"dful of QOJllp'm:i"s. Outside of the Gom-munistsphere, six compani~ control or influence by'minor1ty tnter~st abm.1'i''f8!,ercent o:flhe'wqr-;Yii capacity of

5,4

lIlillicm tons as of 1964.

Ten ot'herpri",""t)',--eempaniesowned about 12 percent, and non-Communist governments about 10 percent. Aluminium Limited (Canada) held the lar-gest single share' of the rlcn-'CoClmunist world capacity----' DIre-fifth.

Alcoa (Aluminum Co. of 'uneri ca , UdAl held a slightly smaller share.

Kaiser Aluminum & Cfremical Co. (ujA), Reynolds Xetals Co. (USA), the two French companies who 'actco-operati*cly (Fechiney and Ugine), and Swiss -Lum.i.n Lurn 'accounted for 41 peroent.

i7

^{- R~vise4 from} Rcontr~butionby the l-rriter to ^q report pending

publication, '''The Alnminuin _L~dustry of the Pacific Northwest", 'used --with theperIDiss~onpiC ,the Bonneville Fower Administration,

qS~~partment of the _I~teri6r~ Portland, OreGon (USA).

E/QN •14jnrR!100 Appendix A . Page 2 ,.,; .

Control and Affiliations of World Primary Alu~inuQ Capacity, 1964

" (

.,-,.'

.lo .} ,,'::,'

Six leaiing c onrparri.es •.•••••••.•.•, •••

Alumi.illum·Limited (Canada) .••• :.

Alcoa.(u5A} ; •.•.. _,., ""

K"i<>er(USA) , : •. " ..

Reynold<> (USA)

0.. ; .. ' 0.;

Pechj;n~J-UgiJn.,':'C]J:pancEi).~;: ; Swi<>s Aluminium (Switzerland) •.••

Ten other rri,Vq'te compandea. ~, ., . ., . " ,.,j .. , . . . . .'" .. " ••.~,.- ,

.... , ,'To'\a1 Non-Communist vor-Ld

C'."

.~211~e :,Appendix 'i'ab.le ..A-J.

Short'

J.

The·s"e:- relati-vc P'-''::~:'~I.i.i-c.rJ.-s''·in ^the non~~Go!T:tnu'nis-t aluminum industry may change scmewha t ,:hen" publ :i:'d:zed bxpansi.ons "'ofcapacity, both under conatruct ion and probably tO'be undertaken, are fulfilled. The

Communist governments account ed fo r 23 pBrcent of the primary capacity of the. wodd e.Iunu.num tndustz-y in 1964 and would. advance .to26 'per9"elft;--o Priva1;ely owned

ana'

affiliated capacity would fall

from-

'89' percent to

.~p.

66

perc e.rt . If planned and possible capacity also is consi<i.'?r.ed, the longer range outlook is more uncertain. It will be affected both by the amount of such capacity that is actually built, and by the ownership and control of major projects, especially those in Africa. Details of ownership and affiliations of the world's prim~ry aluminum capacity, present and prospective, are Liven in Appendix Table A.

E!CN •

14!INR!100

Annex A

Page 3

4. The private enterprise portion of the wOrld ,primary aluminum 'irid{,stry is' not only m~rked by the dominant !)osi tion of six, comparri es ,

It

is

'also ~omplicated by the overlapping of corporate spheres of

"interest through joint ventures in the various stages of the industry '~amo.ngfiveof,thesixlEfaders. These overlaps _r~present a minor"

'fr.>t<;>tion .of: irhet<ltalinvEfstment and' capacity of each. Thus far, the . ower-Laps have.crot been accompanied by anyindicetions of co-operation

to dCllli,!J'acte thl> worldcepaci t;n production, markets and prices. On

"t,thEKcoRtr,arY,these overlapping ent er-pr-Ls es have competed'vigourously

'..^' in the deve'lOpment of excessive capabity;

it>

^{price' cut tLng, in} ab~orb-'ing'independElnt semi-fabricating compamss , arid by iiivading eaclt6ther's

marketsj , 'l'llUsi'f!he Rej'1'l61ds Metals Company tlfrough its

~,ibs-t~~iial

irit'el'est itlBPit'isl1 Aluminium Limited ispatt"-owriElr with Aluminium Limit~d~(jf::,;, Norwegiari primary alumimhiJ cdmpany ,Det Norsk'tift;id, but a'Ls'o "isintensi'vel;;' competitive ;'hth AluminiLlm Lilllitedthroughout the 1'O!'ld and' 'particulaTlyin Canada itse'l:f, the home territory of Aluminium 'Limited, • Rivalry between these companies be'came intense when in

1958

Reynblds moved

fa

'obtain nearly a half o1metship of Bri t±sh Aluminium, thereby~akin~ ov~r the principal customer for primary metal from , Aluminum Limited; By this

means,

Fieynold~ also obtained practical

:controlb-ver'the' Canadian 'primary aluminum SUbsidiary of Bri hsh

A~u!lli,nium:(Can~dian British Aluminium). Reynolds has followed by .ext enc.-iJ;lg materially it" Semi-fabrication capacity in Canada. Reynolds is 'lls'ltna joint venture 1iith Kaiser in the Volta Aluminiuin Company, nq", ,'bp.ilding a smelter! 'in Ghana,and ,Iith Pechiney and'bthersin a

", ·smelter:- b,eing built 'in,Groece.

'5~The alulllinEi plant of the company Fria of the RepubliC! of Guinea :fila joint venture'O:tPechiney', Swiss Aluminium,

EH

fish

Aluminlu~:

(Reynolds), and alsofncludes'Oliri Mathieson ChemicalCorporatiori, tJgine and the Hest German Govez-nmerrt ' s aluminum company, the Vereinigte

Aluminli.um Nerke. Pecjcipe;' ,"duminium Limited and Kaiser are. in a' joint vceJ:lt1lr§to conetruct in Australia, a major<;>.lumina -plant. Pechine;y and K'lise)1' share minority interests in two Spanish aluminum companies. Only

. . . "

r·--":,~., ~

.'

---_

^..._~,~

E/cN ,i14/1J'm/lOo

·'.~ppend.i:X K' Page 4

Aleoa has avoided joint venture~ with others

"eriterea IHtrtnershfpe;;'i thO'ther cb;Apanie~ ⁱⁿ

' :-,'

of the six leaders but has various countries.

,~~." .: ,The, practice ,off'??~'1t :ven~1l1es.!:\',,,,e,xtended "beyond the six Laad e.rs and has becQIIlElunhi3Fsa,l ,in thswqrld pJ:',imary aluminum industry.,· The practice even_. ' - , ; ; '

.

Lnc^{, - ' .- ' , .}Iud.es .joint" ventv.res.bet'fe<m. gevernment conW,'9,lled'^{. ' " .} -,.. ^'_ ..

comp~nies and p;r~,v~,tEl comparnss , aneJ.:.'\Jetweel;l,. l1?yernment;,> . t)l6l(l!3-el·ves.

... -. :.- - ~"':: ~J _',' ._ . ' . . • _.. .'. - ••

-In, the United Stat.es.l t.he prima:r;y a^Lumi num and alumina producer,,: Orjllet

... • " ,', ,.'''; '. :,. .. ' ; ..·~-lJ; : _' '. .!' . • ', ' , . , ' , , ; . ~ -' " '" .. . . .

9

or por at i on , is a joint verrtur-e....o.t' Olin .J!l.athi.e.son",Ghemi c,aL.Cpl'poration

' ii.c· .. ".:.::<r;". - . .:"<i"jri;·-.;;')~:''''" ,> "'.':': .•' !,' ~: ; , , " '" c': : .,.' , ,.

-and Revere Copper and Brass Il).c •• The Tennessee aluminum smelter of the

-. oS '," . ' : _-' . -~ '-', .--.,-,':: . ' : :^{r":,' , : '} , , 0 - : ' _ _ " . ' . ' ,

Consql~dated Aluminium Corporatiqn, owned by Swiss Aluminium, is being

; I , ' . ~.L,... , ' _ _ , r •

expa,?-d~d in 1964 unde~,a nnarlcine;' and· supply arrangemel'\:t> 'fith. the Phelps Dodge_{. ' , - ,}

Corporati~n

to assistthqt company to become,an aluminum

"~~,_,.",,,, ' - ' ":"~~"Li , ' , ' , _'..L ,~.J. .

fabricator. The smelt",'S ..~~,:ing.buiJt int.he State,qf,l''IshingtOl:l,:rb.Y'.

the new Intalco Aluminum Carpqrati,.(':ll repr.esents a j-<Jint venture Qf ._.;

~Jr.,,'.. '.', . ' ; " c' ''', ' : , ~:.. ,__ -,_, '_ "_ '. , , ' .

Pechiney, Ame,rican Metal Climax,a!1d ,the HOWe Sound Company. Har,vey

!' :_ : ' . , - ' C,"-,' :i" -,,", ,..;.,. ,,' " ; " : ^{i !,,':' l.~ ; '} , ; . ' : , ' , __. ' , ,

Aluminum is

in.

ajoint venture m,.th theJeadingmagnel3ium pr cducez- of

EU;op~:,N

;·i1.;'::-:" orsk' HYd'rO" ' "

(cQntro;le~ ~Y\h€l ;o~~.egian

~: "',~' ,;" ,: ",-, - ::, ' - ' ,Government), t'o

~~ild

.,

an aluminum smelter in Norway. This. plant will utilize alumina fr-9,J1li

, . . , . " , r" , . . : , . , , ' J . " .I ;c ' ' , ' , c. '__ " . .

the. Harvey alumina plant und,er constru~tionin the US Virgin _Island~~

.L-~.-- '~J.7 -, " . , ! ~ " . , c . ",-- , ' .

Harvey al(lohas a commitment to a joint.. yenture in an Ita1:i\Ul smelter.,--..- , ,- J::: --'^'f.;: J ,-,~: ,:'~'-j ;

-cr.: 7:~ Amqp,g.. goyernmen1;j,o'dll",d enterprises, the West German Vereinigte Aluminiumlierk!":.>;!j.,•. re.9fmtly associated With private interests in a proj.ect, pres!,nt,lY;sUSpi'llded, to build an aluminum emelter in India;

The Goye/?nment o;(.Hul')g'ilry is assooiated l'ith the Government .of.tIndia in a proposed alumina plant in India. In Australia; ,:the Government of Tasmania is.part. owner of-;,« -, -, ^,-':.~, an.qlu~inum: ," ,.-' - smelter qnd,-;, --- ~lumina'. ,:. -'" plant along^~ with,~,:,iser an,~.Aul3tralianp'rivatecapital,", R~Yl1olclS is, in .partnership .with the Government of Venezuela to build and operate a smelter,

, ":,1:: -. . " . ;,~ ,I ,0:: ."i..:j!lJ. . ,.-. ' !~i:

8. ,.,In addition to joint .vent1il'-es in 'var-i.oue "tages of the aluminum i,llQ.ustry, a gTowing pra.ctioe, is teohnical assistance between aluminum .e!lterprises, narticul arly where the oompany supplying -the 'assistance

aLso ol:J;tains a pos-i;ti,on to Elupply raw ma,t-erials'. . Kaicser A.luminum has such a venture in a fabrication plant in Thailand. Japanese aluminum

C:/CN • 14/D::R/1bO AppendiX" 'PCi':..

PaGe 5 .

comparries have technical. arrangements Hi thUS »r oducer-s , The French comp4PY Pechi~ey has helped in the design and cQns~ructiQnofplants nov. operated by competitors, and is presently assisting the construction of smel ter.s .f'or the Polish and Iiumani an Governments.

9.' Other joint ventures havo been different cor.sortiums were formed in

exploratory

~r c~riditignal.

^Three

the 1950's to investigate the pos"j,'Rilit.ies,o:Lestablisj:ling a,ltflll:inumand powe r projects in .. Ghane ,

...

-", -'.';. ."."~-" . . .'." "..^'

the former A\"Jeian.,G9n"Oq(I,eopoldville )andi'l1 thefol'mer French, colonies of GU~l1ea,alf,a,

,M,o'Jgp

;{~ra~.:;:,a'fille) • ': Thes e consoI'tiumsc~lI\priseddifferent

ID\1J.m~e.r,ships,",,,~,?,m~.oVBrlapping,<i\nd ipcludedullof the 1 ead'i.ng N,ort:h

AlIl,e.ricanarq.'iE,uro~e.ana Iumi.num . pr-oducer-s ; The, Ghana ,consortium ,for ,a^J..' whil,e,in.<;lud,efl,-Alppa and Olin lilatnie.son "hoth,en,',;ithdrew" leaving ,.,-Kaiser .and Reynold"l,,,to, proc eed , . T,tIe, most ambitious conjJ:olithum consisted ofyig\J,tcompanies Looked ts>:"a:rd, an- a;Luminumindustry based on the

pO~j3ibilit~_,_ofdeveloping the 25 mi.Ll Lon kilowatt power- pro.ject at

"rot?;,a,J;{apiif,s,

iJ:l

.the former Belgian Congo , .The ultimate Lnvestment in this project would have e;x:ceeded ,,) Mllion. A- groupoJ, nine compandes considered a power-aluminum project LnvoIvi.ng over ;'300 million for the Fr'ench Congo

CBrazzavill~).

But the oniy

consorti~s

that finally.

went into businesi

i;

'Africa were'the two US companies in the Ghana project"and.t,h-el,fiveJ companies' joined in the Fda alumina project in", Guihea;'l<fost:-.retlently in'-1':r6Y a consortium of North American and

European companies tried to obtain the:Boke bauxite concession in

Guinea, repr,;,senting the' largest high grade d epos a ts known in the 1forld today" _Howe~,;,r, the Gov'ernment of Guinea assigned - this concession to Harvey AlumiriuIJi,rils'part of' a jbint venture between the Govei'nment and

the 1!ompany. ^{_ .} <, "-'

10.

jTheniot{;;~tions

behind the various

consorti1im~

and joint ventures have vari'ed.iri'some cases, particularly the African

projec:t~, th~

purposeslla:,:,'~-Tn:~illded

to spread the large

inv~'stinentand'the

^political

•• , • C':-'1- "L -c,... ' , _ ' . . - . "c· ,- ,1 , , , - , '._'

risk, and to shar-e output too large for an individual company. lnother cases, . such

;~'s

in' Jap',in and Australia,

do~~~tic

capital or enterprise

"as

alre~dy avaiiab-iti~r'

'established but

neededtechnic~i

^-

hh p"

br-Laccess

l'!ICN.14/nmjlOo Appendix A Page 6

to additional markets that could be supplied by outside partners. A' general force, everywhere has been, the ,rivalries of the L'ead Lng aluminum ,c9mpanies in ,seekirH"osi tions in advance of: market development in the-:

various countries through alliances', to share the growing investment requirements. The recent ventures in Ghana, Greece and Australia are examples.

11 • . StiDlUlating,~ome of these rivalries between companies have ,been the ramb^i.tLona of 'oertain governments to develop power projects f'or ge.rJ;E\ral puz-poses andniakethem more feasi bleby selling much ·of 'the .:' power,to an aluminum enterprise.,: In: this categol'y have been'the pow"£-a.Lurmnumrd.eve Lopments in Ghana ; Gr.e:<:l<:ie .and Norway where 'joint ventu"'es are building a.Iumd.num projects tobe SUpplied with government ;po1Jer.

Some:governmehts also want an aluminum industry in which d,oinestic capitalj;larti'cipates as a matter ,of policy. to reduce the influendeo'f foreign compam es, 'Conversely; thii3,;poHcyis accepted

by

^some-foreign companies in orzer to avoid the risks', ofiilxpropri::l;t20n or discrimina'tion a'gainst, an excJ.u·sively)10n-domeiltic enterprise.'

12. 'A list of' the principal joint

v~ntures~"d

consortiums in the '"orld aluminuriJ indu"s;;;y' appears in Appendix

Tatl~

^{A-2 •}

13.:,· Governments also, ~re direct par~ioipants,in the aluminum, industry.

Nearly a third,of the l'orldp:r:imary capapityis oper"ted by government owned enterp+~ses., AS,observedabo:ve, fElven percent of yhe prima,ry capaci.ty is Jile~d by non-CQmmunist govarnmen tEl ,!-nd"23, peroent by

ComWl.ni,s~ ,gOye;:rl)m~n~s. 'I'her e is no movement .a~09~ to~essen the p,?f}i-tion oLgov<,\rnmentsinthe ,indust:r;'y but rather,f0:rc\;he:l1umberof

partioipating gcvernments to increase. Among the countries ~hown in Appendix Table

j,

in which the primary production of a.Iurm.num is being

, o .. . , -';^{.-r ,. , .. . , " .}

promoted or is already committed, non-Communist governments plan to own enterprises in whole

or~art'inIn~{a,

Egypt, Turkey,

Indone~i:a,'and

^.

Venezuela. T'esecount;ies would, .

~oub'~e

. :t.oten the group of\ - .

five';~~'~rn-ments now in the primary aluminum industr;;r. Priva'te enterprise may

. ': i'"' • '-'"; ".l.'\ • - .

-yield in the near future some of its present domination of 69 percent of

'! ..;;."! .

--- ^..

-::/eN • 14/INR/1 00 Appendix A Page 7

the world primary capacity. This may happen not only because of the growth in the number of countries expectine to have governmental parti-cipation in enterprises, but alsn because a faster rate of growth is likely in ,il\"mirlulO consurnptiort in less developed count'ri.va as compared with the llloreJ.l'dus+,raHz'ed nat iona. ~n the less leveloped countries at pre'serti'the 'rble <if GoveI'nmcntin business enterprises;'s increasi~g. ^' 14. Thus far, the effects upon the privately owned aluminum industry of coinpetiti~nf~omthegilvernmentalsector have been no different than the conpett ·hon' between ~orrie of the private enterpri~es themselves.

The'

u',osk'

has'

cod~istentl;"offered

primary aluminum in reoent years at a discount in

lfeste~n

furope, leading to some criticism that Soviet

policy was politically motivated to upset the world aluminum ~ndustry.

11

On the ,ther hand, the Soviet exports to non-Com~nist countries have been a minor portion-2 to

5

percent-of total Soviet production. These

'.. ,

exports have beengro"ing at a time when the world aluminum industry has ,~elt~xoessivs capacity sf North America.

15. Ori'

'the other hand, the Government of Norway through its aluminum:

enterprise,A:rdal og Stmnd.al Verk, has followed the same price cutting policy of th~ USSR in orQer to dispose of its exp~rts. A big difference, however,''la~:he~n"that' theH orwegian metal has become an accepted and growing par,;;;f the world aluminum supply, particularly in the USA~ Norwegian"'~eta:l has bee'n'offeredcommonly in recent years in the USA

. ~~. 'I- ,

also at 'a discount of about 10 percent, with import duty and freight to US 'p'ort absorbed by the seller. The Ardal expr-rts have been the largest'1actor in world' aluminum trade next to Aluminium Limited. The Norwegian company has very limited domestic markets and is forced to

,

rely upon exports for most of its revenues. Ardal accounted for nearly

; i'

if

-Carroll, Ki,lpatrick, Soviet Bargains? Reds Undercut Aluminium Trade,

"tashington Post, April

4, 195

^{0 •} Also,US Probes Soviet Metal Sales,

No

^Evidence of~~arke', Wr'eckinBj Intent, Metal Bulletin, (London), l"ebiuary

11, 1958.

ingot exports of

189,000

metric tons in

1962

E/CN.14/I~/100 Appendix A.

Page 8

half of. Norway's aluminj~m

'..-[:'. <,."

and .contr ;_but~d to _m~..st of the expansion of

US

im,Jorts from Norway from

Dans le document Africa and the aluminum industry (Page 96-105)